23-33 Exercise of a put option on interest rate futures by the buyer of the option results in the buyer putting to the writer the bond futures contract at an exercise price higher than the currently trading bond future.

Question

Quizplus · Accepted Answer

When a put option is exercised, the buyer sells the underlying futures contract to the writer at the exercise price, which is beneficial if the exercise price is higher than the current market price.

23-33 Exercise of a Put Option on Interest Rate Futures